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timber1956

7,423 Posts.

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23/10/15

18:34

Post #: 16242707
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Originally posted by All4One ↑

Timber

700,000,000,000 going backward.

An ASIC paper published in July 2013 tells us there is about $700 billion sitting in term deposits across Australia, making up about 40% of the $1.86 Trillion in total deposits held with Australian Authorised Deposit Taking Institutions (ADIs).

With interest rates so low on bank deposits now and barely above the official interest rates let alone being below the real cost of living this money is being forced out of deposits and into other investments.
Other riskier investments.
Other investments which include property, PM's and the market among other places.
Given this money is owned by mostly people of 60 yo and over and these people are very reserved in their investing they are seeking a safe place to invest.
Property - well yes but not right now.
Markets - well volatility is big and not really in keeping for a lot of these people.
Renovating or adding to a property - well yes and I know several people that are doing just that but it is very hard in a lot of places in Australia getting permission to add to a property. Renovating is ok.
My council would not let me subdivide my block of 5 acres. Not yet but they will in a couple of years because of encroaching urbanisation.

My point being there will probably be a lot of this money heading into the PM markets if it hasn't started already. Perhaps through managed super funds or SMSF or trusts as in my case.
But you can put money on a lot of this money going into PM.
Having read a good article on an investment website I have an account with, they say the banks are raising rates in an attempt to force the cash rate down further and they say the RBA will cut rates by February.
I cant post the article as it is copyrighted.

So Id tend to listen to them , but thanks for the input.

Expand

"But you can put money on a lot of this money going into PM."

You think that SMSF holders (in pension mode) who are getting a small amount of income from their interest rates investments, will rush off and invest in an asset that gives them no income.

They are more likely to rush off and buy large cap equities that pay dividends.
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